How the West Won: The Neglected Story of the Triumph of Modernity (57 page)

To fully explain why the Industrial Revolution began in Britain, it is necessary to explain why it became a bourgeois society.

Liberty and Property Rights

When property rights are not secure, it may be pointless to be more productive. If, for example, the lord leaves the peasant the same bare minimum no matter how good the crop, it is better for the peasant to conceal some of the crop than to improve the yield. That has been the state of affairs in most societies throughout history—not just for the peasantry but for nearly everyone else as well. Recall from chapter 14 that Ali Pasha, the Ottoman commander at the Battle of Lepanto, was afraid to leave his fortune at home, even though he was the sultan’s brother-in-law. The Ottoman sultan, like the emperor of China, claimed ownership of everything; whenever either of them needed funds, “confiscation of the property of wealthy subjects was entirely in order,” as the economist William K. Baumol observed.
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And that is precisely why the rulers of the great empires were rich but their societies were poor and unproductive. It
also is precisely why the Industrial Revolution took place in Britain, not in China or even in France.

Recall from chapter 9 that the Magna Carta guaranteed the property rights not only of British citizens but even of foreign merchants. Hence, unlike their counterparts in China, iron industrialists in England were secure against government seizure. Writing in 1776, the same year that James Watt perfected his steam engine, Adam Smith explained why liberty and secure property rights produce progress:

That security which the laws of Great Britain give to every man that he shall enjoy the fruits of his own labour, is alone sufficient to make any country flourish.… The natural effort of every individual is to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, … capable of carrying on the society to wealth and prosperity.… In Great Britain industry is perfectly secure; and though it is far from being perfectly free, it is as free or freer than in any other part of Europe.
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In contrast, taxes were so confiscatory in France that, as Smith pointed out, the French farmer “was afraid to have a good team of horses or oxen, but endeavors to cultivate with the meanest and most wretched instruments of husbandry that he can,” so that he will appear poor to the tax collector.
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Writing to a friend back in France during a visit to England, Voltaire expressed his surprise that the British farmer “is not afraid to increase the number of his cattle, or to cover his roof with tile, lest his taxes be raised next year.”
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High Labor Costs

An essential element in the Industrial Revolution was the productivity of the British farmer, which freed more well-fed laborers for industrial employment. French farmers, for example, were less productive—to the point that during the eighteenth century as many as 20 percent of the French were so poorly fed that they couldn’t do even light work for more three hours a day.
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In the late 1700s the average British soldier was four inches taller than the average French soldier.
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A related factor was the high cost of labor in Britain. Recall that although the Romans were fully aware of water power, they made almost no use of it. Why not? Because it was cheaper to buy slaves to do such tasks as grinding grain than to invest in building and maintaining waterwheels.

British firms, in contrast, often found it cheaper to invest in machines to reduce the need for labor than to pay laborers to do what the machines could do. In 1775 laborers in London earned about twelve times as much as did laborers in Delhi, four times as much as in Beijing, Florence, or Vienna, and a third higher than in Amsterdam.
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The elevated cost of British labor began with the industrial and economic developments of the thirteenth and fourteenth centuries (discussed in chapter 9). These developments created high demand for British products, especially its woolens, on the international market. The British quickly realized that while their luxury woolens were popular with wealthy Europeans, there was far more money to be made in high-volume, inexpensive goods sold to the mass market. As a French nobleman noted, “The English have the wit to make things for the people, rather than for the rich.”
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By successfully developing a mass market, the British faced the constant need to expand production, and that created competition for workers among British firms. Wages were further raised by the “putting-out” system in the woolen industry (the major British industry in this era), which allowed work to be performed in the home rather than by a gathered labor force. Management saved on the costs of providing the facilities and supervising a workforce, and it passed on part of these savings to workers to attract good laborers.

High wages begat even higher wages because they led to lower fertility rates prior to 1700—and where fertility rates are low, the demand for potential workers tends to exceed the supply. As Robert C. Allen wrote in his economic history of the British Industrial Revolution, the high wages permitted “young people—and young women in particular—[to] support themselves apart from their parents and control their lives and marriages. Women put off marriage until it suited them, and they found the right partner.”
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The average British woman married at about twenty-six, compared with the prevalence of teenage marriages elsewhere in Europe.
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While wages in Britain increased, prices remained about the same as elsewhere, which made British workers better consumers than their counterparts on the Continent.
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For all these reasons, high wages made it profitable for British industries to invest in labor-saving devices, which helped spur the Industrial Revolution.

Cheap Energy

As noted in chapter 9, Britain was well ahead of the rest of the world in switching from wood to coal as its primary fuel. Because coal generated much higher temperatures than wood, the transition had many important consequences for the metal industries. Britain’s adoption of coal also prompted innovations in mining technology and in transportation that made Britain by far the world’s leading producer of coal.
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In the 1560s Britain produced 227,000 tons of coal per year; by 1750 that had risen to 5.2 million tons per year; by 1800 coal production exceeded 15 million tons a year.
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Consequently, coal was far cheaper in Britain than anywhere else. This, quite literally, fueled the Industrial Revolution.
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Embracing Commerce

In addition to having secure property, high wages, and cheap energy, British culture was favorable to commerce. That made Britain different from most other societies throughout history, which generally regarded commercial activities as degrading.

In his
Politics
, Aristotle noted that although it might be useful to explore “the various forms of acquisition” of wealth, it “would be in poor taste” to do so. He condemned commerce as unnatural, unnecessary, and inconsistent with “human virtue.”
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Plutarch thought it especially virtuous that Archimedes, one of the shining lights of ancient inventiveness, regarded all practical enterprises “as ignoble and vulgar.”
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Cicero wrote with contempt that “there is nothing noble about a workshop.”
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As for the Romans, they were especially acquisitive but considered participation in industry or commerce to be degrading.
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The Emperor Constantius declared, “Let no one aspire to enjoy any standing or rank who is of the lowest merchants, money-changers, lowly officers or foul agents of … assorted disgraceful professions.”
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Freedmen were largely responsible for commercial and industrial activities in Rome. Having
been slaves, they were already stigmatized and had no status at risk in such enterprises.
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Freedmen were, of course, at the mercy of the state, and their property was insecure.

Things were not much different in Byzantium. In 829 Emperor Theophilus watched a beautiful merchant ship sail into the harbor of Constantinople. When he asked who owned the ship, he was enraged to learn that it belonged to his wife. He snarled at her, “God made me an emperor and you would make me a ship captain!” He had the ship burned at once.
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In China, as seen in previous chapters, the Mandarins held commerce in such contempt that they outlawed significant commercial enterprises.

Similar attitudes prevailed in many parts of Europe. In 1756 the Abbé Coyer wrote: “The Merchant perceives no luster in his career, & if he wants to succeed in what is called in France
being something
, he must give it up. This … does a lot of damage. In order to be
something
, a large part of the Nobility remains nothing.”
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Contrast all this with the frequent joint financial ventures Queen Elizabeth entered into with merchant voyagers and privateers. Elizabeth reigned during a major transformation of the British class system—a transformation that supplied the innovators, inventors, and managers who produced the Industrial Revolution.

This transformation resulted in part because the British embraced trade with the New World. Sophisticated recent research has validated the traditional view that the rise of the bourgeoisie occurred first in those European nations most involved in Atlantic trade
and
having relatively free (nonabsolutist) political institutions.
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That is why Britain and the Netherlands emerged as the first bourgeois societies, while absolutist monarchies prevailed in the other Atlantic trading nations: Spain, Portugal, and France. Why absolutist states limited the rise of the bourgeois is not difficult to explain. By imposing a command economy, the state also sustained the nobility’s status and power—and their contempt for commerce. Moreover, these states actually impeded commerce. In France, for example, nearly every commercial enterprise operated under a monopoly license purchased from the state; there was no competition.
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But why should Atlantic trade have spurred the rise of the bourgeoisie in nonabsolutist nations? Three factors were involved. First, vigorous Atlantic trade expanded and strengthened those merchant groups involved directly or indirectly in this trade. Second, as these groups grew
and became rich, they gathered sufficient power to demand changes, including even more secure property rights, that expanded their ranks. The third factor might have been the most important one: by virtue of their success and influence, the bourgeois earned respect and dignity.
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Claims
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that the rise of the West was funded by the profits of trade with the New World—from colonialism and slavery—are refuted by the simple fact that these profits were too small to have made a substantial contribution to the economic growth of western Europe.
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These profits were, however, sufficient to make groups of merchants “very rich by the standards of seventeenth- and eighteenth-century Europe, and typically politically and socially very powerful,” in the words of the historian J. V. Beckett.
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MIT economist Daron Acemoglu and his colleagues empirically confirmed an immense historical literature proposing that from 1500 through 1800:

But in Britain, it was not just the rising bourgeoisie that proved open to commerce. The nobility displayed little of the contempt for commercial activities that their peers on the Continent did. For one thing, British nobles were much less inclined to live in London and spend their days at court (in part because several sixteenth-century kings had taken measures to deter the aristocracy from spending time at court).
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In contrast, most of the French nobility lived in Paris and seldom visited their estates. Therefore, rather than being absent landlords, most of the British nobility
took an active role in administering their lands. In this sense they actually “worked” for their livings. Moreover, they were fully involved in the market economy, their incomes being governed by prices for their crops, livestock, wool, and other products such as minerals. In fact, according to scholar Colin Mooers, an estimated “two-thirds of the peerage, in the period 1560–1640, was engaged in colonial, trading or industrial enterprises.”
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